The Administration has released the names of one entity and eight
individuals against whom the President decided to impose sanctions
pursuant to the Foreign Narcotics Kingpin Designation Act (21 U.S.C.
1901-1908). The Foreign Narcotics Kingpin Designation Act (the
"Kingpin Act") targets, on a worldwide basis, significant foreign
narcotics traffickers, their organizations, and operatives.

Background

The purpose of the Kingpin Act is to deny significant foreign
narcotics traffickers, their related businesses, and their operatives
access to the U.S. financial system and all trade and transactions
involving U.S. companies and individuals. The Kingpin Act authorizes
the President to take these actions when he determines that a foreign
narcotics trafficker presents a threat to the national security,
foreign policy, or economy of the United States. Congress modeled the
Kingpin Act after the effective sanctions program that the Department
of the Treasury's Office of Foreign Assets Control ("OFAC") administers
against the Colombian drug cartels pursuant to Executive Order 12978
issued in October 1995 under authority of the International Emergency
Economic Powers Act ("IEEPA").

Implementation

The Kingpin Act requires that the Departments of the Treasury,
Justice, State, and Defense; and the Central Intelligence Agency,
coordinate the identification of proposed kingpins (individuals and
entities) for designation by the President. Although not required by
statute, the Department of Homeland Security is also included in the
process. By June 1 each year, the Act calls for the President to
report to specified congressional committees those "foreign persons
[he] determines are appropriate for sanctions" and stating his intent
to impose sanctions upon those foreign persons pursuant to the Act.
While this is a recurring annual requirement, the President may
designate significant foreign narcotics traffickers at any time.

The long-term effectiveness of the Kingpin Act is enhanced by the
Department of the Treasury's authority (in consultation with
appropriate government agencies and departments) to make derivative
designations of foreign individuals and entities providing specified
types of support or assistance to designated traffickers. This
authority broadens the scope of application of the economic sanctions
against designated kingpins to include their businesses and
operatives. To date, the President has designated 57 Kingpins and the
Department of the Treasury has announced a total of 116 derivative
designations, 34 entities and 82 individuals, pursuant to section
805(b) of the Kingpin Act. These entities and individuals are subject
to the same sanctions that apply to kingpins. In addition, designated
individuals and immediate family members who have knowingly benefited
from the designated individuals' illicit activity will be denied visas
to the United States under 8 U.S.C. section 1182(a)(2)(C).

The Kingpin Act provides for criminal penalties of up to 10 years
imprisonment for individuals and up to a $10 million fine for entities
for violations, as well as a maximum of 30 years imprisonment and/or a
$5 million fine for officers, directors or agents of entities who
knowingly participate in violations. The Kingpin Act also provides for
civil penalties of up to $1 million.

Designations

The entity and foreign persons that the President has designated as
appropriate for sanctions pursuant to the Kingpin Act are:

Arriola Marquez Organization (Mexico)

Oscar Arturo Arriola Marquez (Mexico)

Miguel Angel Arriola Marquez (Mexico)

Ignacio Coronel Villareal (Mexico)

Rigoberto Gaxiola Medina (Mexico)

Marco Marino Diodato del Gallo (Bolivia)

Otto Roberto Herrera Garcia (Guatemala)

Haji Baz Mohammad (Afghanistan)

Wong Moon Chi (China)

These names are being added to the designations first announced in
June 2000, and every year since then. A complete list of individuals
and entities designated can be found at www.treasury.gov/ofac